Pharmacy Benefit Spending on Oral Chemotherapy Drugs

BACKGROUND: Pharmacy benefits have historically excluded injectable drugs,resulting in coverage of injectable drugs under the medical benefit. High-costbiologics and other new drug therapies are often injectables and therefore havenot presented cost threats to pharmacy benefits. The U.S. Food and Drug Administration approval of capecitabine, an oral form of fluorouracil, in 1998,and imatinib mesylate in oral dose form for chronic myeloid leukemia, in 2001,signaled a new period in budget forecasting for pharmacy benefits, particularly for small, self-insured employers for whom a drug with a cost of $25,000 peryear of therapy for 1 patient could increase total pharmacy benefit costs by 10% or more. OBJECTIVES: To quantify the actual relative costs of the oral chemotherapydrugs in pharmacy benefits in 2006 and identify the history of spending onoral chemotherapy drugs relative to total pharmacy benefit spending for small, self-insured employers over the 4.5 years through May 2006. METHODS: Administrative pharmacy claims from the database of a pharmacy benefits manager (PBM) for approximately 500,000 members of small, self-insuredemployer plans were used to calculate the net plan cost of oral chemotherapy drugs relative to total drug benefit costs for the period January 1, 2002, through May 31, 2006. Current costs for oral chemotherapy drugs for small employers were compared with an insured health plan of approximately the same numberof members for dates of service January 1, 2006, through May 31, 2006. RESULTS: This descriptive analysis found that oral chemotherapy drugs represented 0.27% of total drug benefit costs, or approximately $0.08 per member permonth (PMPM) for small, self-insured employers in 2002, rising linearly to 0.73%,or approximately $0.24 PMPM in the first 5 months of 2006. Members in pharmacy benefit plans sponsored by small employers paid an average 6.9% cost share fororal chemotherapy drugs in 2006, nearly identical to the average 8.5% paid by members of an insured health plan of similar size in total membership, versus 26.9% average cost share for all drugs. Imatinib mesylate accounted for 45% oftotal spending on oral chemotherapy agents in 2002 versus 40% in 2006. CONCLUSIONS: Spending on oral chemotherapy drugs as a proportion of total pharmacy benefit costs has more than doubled, from about 0.3% in 2002 to 0.7%in 2006. For small, self-insured employers, this represents a nearly 3-fold increasein spending, from about $0.08 PMPM in 2002 to about $0.24 PMPM in 2006.

trial involved 500 chronic phase patients with chronic myelogenous leukemia (CML) who had failed to respond to interferon therapy. CML is characterized by translocation of chromosome material from chromosome 9 to chromosome 22 with formation of the so-called Philadelphia chromosome. After 6 months, greater than 90% of STI571-treated patients had white cell counts return to normal range and half had a significant reduction of Philadelphia chromosome-positive cells. 5 In a second study of 154 CML patients who had received STI571 for at least 1 month, 78% had a hematology response and 14% (22 patients) experienced disease remission. A third trial involving 94 patients in blast crisis (end-stage CML) showed a 47% response rate after 2 months of therapy with STI571. The researchers speculated that the combination of STI571 and cytosine arabinoside (Ara-C) or interferon could one day produce a cure for CML. Stem cell (bone marrow) transplant remains the only known cure for CML. 6 The manufacturer sought fast-track approval in Europe and the United States, describing STI571 as a "smart" drug that disables only the abnormal protein that causes CML without affecting normal cells. In March 2001, STI571 was expected to be approved by the FDA as early as fall 2001. 7 In fact, the FDA approved STI571 (imatinib mesylate) in May 2001, just 3 months after the fast-track approval request, with a proprietary name change from the already-approved European name Glivec to Gleevec. 8 The manufacturer marketed imatinib mesylate in June 2001 at an initial $19.68 average wholesale price (AWP) per 100 mg capsule, resulting in an annual cost in the range of $29,000 to $57,500 per patient when dosed in the recommended range of 400 mg to 800 mg per day. Nine months later, the FDA approved imatinib mesylate for the additional indication of inoperable or metastatic malignant gastrointestinal stromal tumors (GIST). 9 The GIST indication represented a significant advance in pharmacological treatment: until then, GIST had responded extremely poorly to polychemotherapy, and patients with inoperable GIST had extremely poor prognoses. Imatinib mesylate became the first effective treatment for GIST. 10 Imatinib mesylate is now approved for the treatment of patients with all 3 stages of CML-myeloid blast crisis, accelerated phase, and chronic phase-either before or after other therapy, and GIST. 11 Its dosage form has been redesigned for patient convenience, and it is now available as 100 mg scored tablets and 400 mg tablets.  12 Two large trials involving 2,130 chemotherapy-naïve patients with stage III and IV NSCLC showed that gefitinib failed to improve tumor response rates, time to progression, or overall survival, when dosed at either 250 mg or 500 mg per day in combination with platinumbased chemotherapy regimens. The chemotherapies given in these first-line trials were gemcitabine and cisplatin (n = 1,093) or carboplatin and paclitaxel (n=1,037). Subsequent to the release of the findings from these 2 large clinical trials, the FDA asked the manufacturer to relabel gefitinib to restrict it to monotherapy for treatment of patients with locally advanced or metastatic NSCLC after failure of both platinum-based and docetaxel chemotherapies. 13 On June 17, 2005, the FDA approved new labeling for gefitinib for use only in patients who have demonstrated benefit from receipt of the drug. 14 As part of the new labeling, distribution of gefitinib is restricted under a risk management plan called the Iressa Access Program. Gefitinib' s effectiveness had been determined from objective response rates, and no controlled trials have demonstrated clinical benefit (e.g., improved disease-related symptoms or increased survival).

Pharmacy Benefit Spending on Oral Chemotherapy Drugs
Off-label use of gefitinib includes treatment of squamous cell head and neck cancer.

Erlotinib
Erlotinib (Tarceva) was first approved by the FDA on November 18, 2004. Erlotinib inhibits intracellular phosphorylation of tyrosine kinase associated with the epidermal growth factor receptor (EGFR), and further work is under way to completely characterize its mechanism of action. 15 Like gefitinib, erlotinib is approved as monotherapy for patients with locally advanced or metastatic NSCLC after failure of at least 1 prior chemotherapy regimen. It is not approved, however, for first-line therapy, since 2 multicenter, placebo-controlled, randomized, phase 3 trials showed no clinical benefit when erlotinib was combined with platinum-based chemotherapy (carboplatin and paclitaxel, or gemcitabine and cisplatin) as first-line treatment of patients with locally advanced or metastatic NSCLC. 16 On November 2, 2005, the FDA approved the second indication for locally advanced, unresectable, or metastatic pancreatic cancer in combination with gemcitabine. 17 Unlike gefitinib, erlotinib' s effectiveness has been proven in randomized, controlled trials. 18

Sorafenib and Sunitib Malate
The FDA approved 2 additional oral agents, sorafenib (Nexavar) on December 20, 2005, 19 and sunitinib malate (Sutent) on January 26, 2006. 20 Sorafenib, a multikinase inhibitor that decreases tumor cell proliferation, was approved for advanced renal cell carcinoma (RCC). Dose instructions include expected skin toxicity and consequent dose reductions to 50% or 25% of the initial recommended dose of 400 mg (two 200 mg tablets) twice daily. 21 Sunitinib malate, which inhibits multiple receptor tyrosine kinases, was approved for GIST after disease progression or imatinib mesylate intolerance. Concurrent FDA approval for the indication RCC was based on partial response rates and duration of responses since there are no randomized trials of sunitinib malate demonstrating clinical benefit, such as increased survival or improvement in disease-related symptoms in RCC. 22

Thalidomide
On May 26, 2006, the FDA approved thalidomide (Thalomid) under expedited review for the indication of newly diagnosed multiple myleoma patients in combination with dexamethasone. 23 Despite a preapproval, U.S. market withdrawal decades earlier for teratogenicity identified in postapproval European markets, thalidomide had been reintroduced to the U.S. market on July 16, 1998, when the FDA approved an indication for erythema nodosum leprosum (ENL; a complication of leprosy). 24 Thalidomide' s wide range of off-label uses include treatment of graft-versus-host disease after bone marrow transplantation, refractory multiple myeloma, primary brain tumors, appetite stimulant for cachexia in advanced cancer or human immunodeficiency virus (HIV)/acquired immunodeficiency syndrome (AIDs), aphthous ulcers, and prostate cancer in combination with docetaxel. 25

Dasatinib
The FDA approved dasatinib (Sprycel) on June 28, 2006, for use in the treatment of adults with chronic phase, accelerated phase, or myeloid or lymphoid blast phase CML with resistance or intolerance to prior therapy, including imatinib mesylate. 26 The expedited approval requires additional follow-up data to be converted to regular approval by the FDA. The FDA granted regular approval to dasatinib for use in the treatment of adults with Philadelphia chromosome-positive acute lymphoblastic leukemia with resistance or intolerance to prior therapy.

Lenalidomide
The ss Methods The present study was precipitated in part by the pharmacoeconomic work by Ramsey et al. who earlier this year found a seemingly small budget impact from the coverage of erlotinib as a formulary drug, for 1 indication, NSCLC. 30 The estimated budget impact of $0.01 per member per month in a hypothetical health plan of 500,000 members could be consequential in a small employer health plan of 500 members, particularly if the pharmacy benefit is self-insured. Second, 5 new FDA approvals for high-cost oral chemotherapy drugs in 7 months through June 30, 2006, creates the need for descriptive, benchmark analysis of the actual direct pharmacy benefit costs for oral chemotherapy drugs. Data for this study were obtained from 2 sources: the administrative pharmacy claims in the database of a pharmacy benefits manager (PBM) for approximately 500,000 members from more than 2,000 small, self-insured employers (2 to 5,000 members each) and an insured health plan with approximately 520,000 members. The PBM serves members nationwide, and the insured health plan is located in the southern United States. The net plan cost of oral chemotherapy drugs relative to total drug benefit costs was calculated for the period from Drug cost is defined from the payer perspective as the allowed charge less the member cost share (sum of deductibles, copayments, and coinsurance); hence, unless otherwise noted, drug cost is the net plan cost after subtraction of member cost share. Allowed charge is the sum of the allowed (discounted) drug ingredient cost plus the allowed pharmacy professional fee. Days of drug therapy is the sum of the days supply submitted    Figure 2). Due to dollar copayments as the predominant structure for member cost sharing in pharmacy benefit plans of small, self-insured employers during this time period and the relatively high cost for oral chemotherapy drugs, the average member cost share for oral chemotherapy drugs was about one third that for all drugs over this 4.5-year period Figure  3). In the first 5 months of 2006, the average member cost share for oral chemotherapy drugs was 6.9% for beneficiaries in pharmacy benefit plans sponsored by small employers versus an average 8.5% for the comparison insured health plan of similar total membership (data not shown). Imatinib mesylate accounted for 45% of total spending on oral chemotherapy agents for small employers in 2002 versus 40% in 2006 ( Figure 4). Despite market availability for only a few months in 2006, erlotinib accounted for 18% of the net cost of oral chemotherapy drugs, followed by capecitabine at 14%; among the other oral chemotherapy drugs, each accounted for less than 10% of total spending. The distribution of spending among the oral chemotherapy agents was similar for the insured health plan, with the exception of gefitinib which, unlike the small employers, had some utilization at 3% of total spending ( Figure 5), accounting for approximately $0.01 PMPM ( Table 2).

Small Employer Cost Per Member Per Month for Oral Chemotherapy Drugs
The actual price of the oral chemotherapy drugs in the first 5 months of 2006 is derived from the average allowed charge per day of therapy multiplied by 30 to obtain a standardized price per 30-day supply, prior to subtraction of the member cost share. Lenalidomide and sunitinib malate had the highest average allowed charge per 30-day supply, approximately $7,000 for each ( Figure 6). The average allowed charge per 30-day supply for the 3 highest-expenditure oral chemotherapy drugs was $3,015 for imatinib mesylate, representing approximately 40% of total spending; $2,864 for erlotinib (18% of total spending); and $2,127 for capecitabine (14% of total spending).

ss Discussion
Prior to the market introduction of capecitabine and imatinib, chemotherapy agents were either relatively low-cost oral drugs or injectable drugs. The relatively low-cost oral chemotherapy drugs included mercaptopurine (6-MP, Purinethol), and thioguanine, both approved before 1967. High-cost chemotherapy drugs such as trastuzumab (Herceptin; initially approved by the FDA on September 25, 1997 31 ), bevacizumab (Avastin; approved for metastatic colon cancer February 26, 2004), and cetuximab (Erbitux; approved for metastatic colon cancer, February 12, 2004) are available as injectable dosage forms only. All of these have had either indications added to their approved package labeling or will have in the near future.
While the present impact on outpatient pharmacy budgets is still relatively small, oral antineoplastic agents are associated Thalidomide is excluded from these data since the drug was not approved for a cancer indication until May 26, 2006; summary data for claims with dates of service from January 1, 2002, through May 31, 2006 for more than 2,000 small, self-insured employers.

FIGURE 5
with a host of attractive features that guarantee the commitment of research funding and market introduction of more oral agents. Obvious reasons for the preference of oral dose forms over injectable dose forms include ease of administration, patient preference, and lower risk of complications compared with injectable drugs, particularly intravenous administration. 32 Less obvious reasons include the lower cost of administration, (e.g., the direct costs in medical professional time, medical supplies, and intravenous pumps) and the indirect costs associated with travel time to medical facilities and caregiver time. Oral agents may have fewer side effects with the possibility of improved tolerance and adherence to therapy. 33 However, adherence to therapy is not necessarily assured with oral chemotherapy agents, 34 and the cost of production is not necessarily lower. 35 A drug like erlotinib, with an average charge per year of therapy of approximately $35,000 for 1 patient and a net cost after member cost share of $34,000 or more, can increase net pharmacy benefit costs by more than 15%, or $5.67 PMPM, for a small self-insured employer with 500 enrolled members. The matter of financial budget impact on a large health plan was posed by Ramsey et al. in mid-2006. 30 The authors used a pharmacoeconomic model to predict the budget impact of erlotinib on a hypothetical third-party payer with 500,000 enrolled members. When used according to the FDA-approved label indications as second-line or third-line therapy for NSCLC, they estimated that the incremental cost of placing erlotinib on the drug formulary would be less than $0.01 PMPM. This pharmacoeconomic work suggests a minimal and insignificant budget impact for a 500,000-member health plan. However, the actual cost effects could be different since (a) the assumed reductions in chemotherapy-related infusion costs may or may not be realized, and (b) costs associated with adverse events may be either over-or under-reported in the actual medical and pharmacy claims data.
From a silo-perspective in cost management, a predominant business perspective in 2006, including the focus on quarterly financial results for the enterprise and its individual departments and cost centers, the immediate effect on departmental (benefit) costs is important. This present research suggests that prior to consideration of potential offsetting costs, the direct drug benefit costs for erlotinib in 2006 are approximately $0.04 PMPM, approximately 5 times higher than the cost identified in the research by Ramsey et al. This 5-fold discrepancy suggests a need to validate the pharmacoeconomic modeling with actual health plan data for pharmacy and other medical costs.
The most likely source of the cost discrepancy is the focus by Ramsey et al. on only 1 of erlotinib' s 2 approved indications. In ignoring erlotinib' s approval for first-line treatment of patients with locally advanced, unresectable, or metastatic pancreatic cancer when used in combination with gemcitabine (Gemzar), 36 the budget forecast model is not a budget forecast model for the drug but for the drug for a specific indication. A portion of the cost difference could also be attributable to off-label use, a factor for erlotinib and the other oral chemotherapy agents as it is for all drugs. For erlotinib, off-label use includes treatment of squamous cell head and neck cancer.

Limitations
This analysis was intended to be descriptive, focusing on the direct financial effects of oral chemotherapy drugs on pharmacy benefit costs. Cost-benefit analysis was beyond the objective and scope of this research. Analysis of the cost per outcome is information that is needed. For example, one of the 2 clinical trials used to seek FDA approval for the multiple myeloma indication for lenalidomide showed that median time to progression of disease was increased approximately 17 weeks, from 19.9 weeks in the dexamethasone group to 37.1 weeks in the lenalidomide plus dexamethasone group. 1 In addition to the drug cost in excess of $6,000 per month, the cost in terms of side effects was large, with a greater proportion of patients experiencing serious side effects such as febrile neutropenia and deep vein thrombosis (DVT) in the lenalidomide + dexamethasone group compared with the dexamethasone group alone. The incidence of thrombotic events such as DVT, pulmonary embolism (PE), and intracranial venous sinus thrombosis was 12% in the lenalidomide + dexamethasone versus 4% in the dexamethasone group. The "black-box" warning on the label of lenalidomide includes the potential for birth defects; hematologic toxicity, including neutropenia and thrombocytopenia; and DVT and PE. 37 Results in the willingness-to-pay research suggests that patients with NSCLC and healthy subjects are willing to pay a median of $100 CAD per month of therapy with an oral epidermal growth factor receptor tyrosine kinase inhibitor such as erlotinib, 38 less than 5% of the actual price of the drug in the present study.
Others have posed the question of the value of the outcomes obtained for the rapidly escalating cost of chemotherapy regimens. Schrag compared the costs of various drug therapy regimens for metastatic colorectal cancer following FDA approval in February 2004 of the monocolonal antibodies bevacizumab (Avastin, targeting vascular endothelial growth factor) and cetuximab (Erbitux, targeting epithelial growth factor receptor) for use in conjunction with cytotoxic drug regimens. 39 Calculated at 95% of the average wholesale price in May 2004, 8 weeks of the Mayo Clinic regimen of monthly bolus of fluorouracil plus leucovorin cost $63 versus $304 for a weekly bolus of fluororacil plus leucovorin (Roswell Park regimen) or $263 for biweekly fluorouracil plus leucovorin in a 48-hour infusion (LVSFU2 regimen). Adding either irinotecan (FOLFIRI) or oxaliplatin (FOLFOX) to LVSFU2 increased the initial 8-week cost to $9,381 or $11,889, respectively. The addition of bevacizumab to FOLFIRI or FOLFOX increased the 8-week cost in 2004 dollars to about $21,000, and cetuximab added to either irinotecan or FOLFIRI resulted in an 8-week cost of approximately $30,700. The numerator for the benefit-cost equation is in the context of 8 months median duration of survival without chemotherapy, 12 months with fluorouracil, and 21 months with FOLFIRI or FOLFOX regimens. The addition of either bevacizumab or cetuximab increased the average drug treatment cost to $161,000 per patient, without evidence that median survival would at any additional time extend beyond the 21 months seen with FOLFIRI/FOLFOX. The present research is representative only of small, selfinsured employers. While an insured health plan of similar-size membership had similar distribution of spending on oral chemotherapy drugs in 2006, the PMPM costs were $0.42 versus $0.24 for the group of small employers (PBM), including $0.01 PMPM contributed by gefitinib, which had no utilization in the group of small employers. Health plans that manage pharmacy benefits more closely, such as the use of prior authorization interventions to ensure utilization of these drugs in accordance with FDA-approved indications or other treatment guidelines, will no doubt experience different costs.

ss Conclusion
The FDA approval of 5 oral drugs for chemotherapy indications in the 7-month period ended June 30, 2006, portends increased spending in outpatient pharmacy benefit plans. At mid-year 2006, total spending is in the range of $0.24 to $0.42 PMPM for 2 different pharmacy benefit sponsors, excluding the additional costs of approximately 7% to 8% for member cost share. Imatinib mesylate accounted for 30% to 40% of total spending for oral chemotherapy drugs in the first 5 months of 2006.